A manufacturing firm is the sole seller of a specialized machine. The demand schedule for this product is shown in the table below.

$\begin{array} { | c | c | c | c | c | c | c | c | }
\hline \text { Price } & \$ 700000 & \$ 600000 & \$ 500000 & \$ 400000 & \$ 300000 & \$ 200000 & \$ 100000 \
\hline \begin{array} { c }
\text { Quantity } \
\text { Demanded }
\end{array} & 0 & 1 & 2 & 3 & 4 & 5 & 6 \
\hline
\end{array}$
-For this firm,the marginal revenue of the third machine is:

Question

A manufacturing firm is the sole seller of a specialized machine. The demand schedule for this product is shown in the table below.

$\begin{array} { | c | c | c | c | c | c | c | c | } 
\hline \text { Price } & \$ 700000 & \$ 600000 & \$ 500000 & \$ 400000 & \$ 300000 & \$ 200000 & \$ 100000 \
\hline \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & 0 & 1 & 2 & 3 & 4 & 5 & 6 \
\hline
\end{array}$
-For this firm,the marginal revenue of the third machine is:

Quizplus · Accepted Answer

The marginal revenue is the change in total revenue from selling one more unit. Selling the third machine increases quantity from 2 to 3, reducing price from $500,000 to $400,000. Total revenue changes from $1,000,000 (2*$500,000) to $1,200,000 (3*$400,000), so marginal revenue is $200,000.

A Manufacturing Firm Is the Sole Seller of a Specialized